In today’s hypercompetitive environment, it is critical for manufacturing firms to be agile in
responding to ephemeral opportunities in the marketplace. This agility often requires the collaboration
with supply chain partners. However, how a manufacturing firm collaborates with its
suppliers to achieve agility remains an understudied issue. This study holds that manufacturing
firms and their suppliers need to develop manufacturer-supplier flexibility accompanied with
well-built integrated information systems and associated analytical systems (such as business
intelligence) to enable manufacturer agility. To deepen our understanding of the roles of manufacturer-
supplier flexibility and IOS technologies in facilitating manufacturer agility, we build
and test a model based on the real options theory and bounded rationality. Based on 141 matched-
pair samples of Taiwanese manufacturing firms, our findings demonstrate the importance of
manufacturer-supplier flexibility in achieving higher manufacturer agility, wherein IOS integration
enables better flexibility. We also show IOS-enabled analytical ability can strengthen
the effect of such flexibility on manufacturer agility. Implications of the results for practices and
academics are provided.